The report, commissioned by the government, suggests that a major fracking effort would deliver about 25% of the UK's annual gas needs in its peak years in the 2020s and provide up to 32,000 jobs, although as few as one-fifth of these could be local.

However, Keith Taylor, the Green party's MEP for south-east England, said: "In reality, many people will be unwilling to accept air pollution, noisy trucks, gas flaring and potential water contamination in exchange for the government's bribe."

The assessment, required by law, was produced by consultants Amec and also warns that the billions of litres of polluted wastewater produced by a big shale gas industry "could place a significant burden on existing wastewater treatment capacity". Fracking uses high pressure water and chemicals to fracture underground rock and release trapped gas.

"There is a huge amount of shale gas underneath us all and what is important for public confidence is to show the regulatory framework is robust," said energy minister, Michael Fallon. He said Tuesday's announcements were "stepping up the search for shale gas" but declined to say whether he would welcome fracking under his own house. The government also published a "roadmap" of existing regulations covering the sector, intended to "provide certainty to investors and local communities".

Fallon said: "There could be large amounts of shale gas available in the UK, but we won't know for sure the scale of this prize until further exploration takes place. It is an exciting prospect, which could bring growth, jobs and energy security. But we must develop shale responsibly."

Environmental campaigners criticised the government's drive to develop shale gas. Friends of the Earth's senior UK climate campaigner, Tony Bosworth, said: "These plans cast a dark shadow over many communities across Britain who could now face the threat of fracking in their backyard."

Greenpeace's Anna Jones said: "There's no public mandate for this industrialisation of the English countryside and for digging up new forms of fossil fuels. Real energy security in the UK can only be achieved through clean renewable sources and energy efficiency."

In the "high activity" scenario used in the Amec assessment, 2,880 wells would be drilled a year from 120 well pad locations at the industry's peak, with the wells operating for 20 years. In that scenario, 16,000-32,000 direct and indirect jobs could be created, Amec calculated. But under a "low activity" scenario, with 380 wells drilled a year from 30 sites, just 2,500-5,000 jobs would be created.

In August, the prime minister, David Cameron, said 74,000 jobs could be created, quoting a report from the Institute of Directors that envisaged 4,000 wells.

Estimates of the financial incentives for local communities were based on current industry plans to give an upfront £100,000 to a community that accepts a fracking exploration site. If the site goes into production, 1% of revenues would then flow into the community, leading to a further £2.4m-£4.8m per site.

The Amec report found that a total of 58-144bn litres of water would be needed to frack the wells envisaged in the high activity scenario. That scenario would also see up to 108bn litres of waste water contaminated with fracking chemical and radioactive elements that occur naturally in rock.

In November, the UK's water industry admitted fracking may be impractical in parts of the UK due to the scarcity of local water supplies. Some of the fracking water would need to be trucked into sites, with wastewater being trucked out, and Amec estimated 14 – 51 journeys a day for each site, which "could have an adverse impact on traffic congestion, noise or air quality".

Fallon said the impact of such truck movements would be considered under the planning permission required by fracking companies and that night-time and weekend journeys had been banned at some existing sites. He also echoed "major concerns" expressed by Cameron that potential EU regulation of fracking would damage the development of the industry.

Tom Greatrex, Labour's shadow energy minister, said: "Rather than focusing on the need for robust regulation and comprehensive monitoring to address legitimate environmental concerns, the government seem to prefer to give licence to those who make simplistic comparisons to the US that don't stand up to scrutiny."

The Amec report said that shale gas could reduce the UK carbon emissions if it replaced imported liqueified natural gas (LNG), but noted that if LNG and coal no longer used in the UK were used elsewhere, then global carbon emissions would increase.